It's a marathon: Raj Jain

Walmart India President & Bharti-Walmart Managing Director Raj Jain speaks to Nivedita Mookerji on the opening up of multi-brand retail to foreign investors, partnership, hurdles in investing in Bharti Retail’s Easy Day stores, use of the Walmart brand name, and more.

What are the store formats that you are looking at in India?
The policy allows us to only open stores in towns with a population of at least 1 million. So, by its very nature, it’s going to be very urban-centric and in large towns. Since availability of real estate is a problem, very large format stores are completely out.

Right now, there are around 200 Easy Day stores of Bharti Retail. So, will you launch new stores as well?
My understanding is that the investment of $100 million in three years (that the policy mandates) will have to go into new stores and new backend infrastructure. And that’s what we intend to do.

Is the mandatory $100 million investment a concern for retail chains?
In the long run it’s not a concern as India will attract billions of dollars. The issue is to understand what this $100 million means over three years.

When is Walmart likely to seek permission to enter multi-brand retail in India?
It will take us 45 to 60 days to pre-finalise our plans and make a move.

Where will you sign the agreements — here in India or the US?
Agreements with whom?

The Bharti group?
(Laughs)…. Those are on-going discussions. So what agreements we will sign with whom is being discussed.

Is it possible that you could explore other partnerships as well?
We have a great relationship with Bharti. They are our natural partners in India. We would obviously like to explore that. But, let’s see…

If you enter a partnership with Bharti for frontend, will it be a 50-50 JV like in cash and carry, or 51-49?
The policy allows for a 51 per cent holding by the foreign retailer. Yes, we would prefer whatever we can.

If you enter a 51-49 JV for frontend, won’t you think of rejigging the 50-50 JV with Bharti Enterprises for cash and carry too?
Over the next 60 days, we will determine what our relationship with Bharti will be, whether there will be rejig of the cash and carry equity structure or not and so on.

What about the brand? Will the Walmart name be there on the Indian stores?
Walmart has 62 brand names across the world. In Japan the Walmart brand is not used at all. So, it’s not necessary to use the name Walmart in India. It is a preferred brand to use, especially for large format stores. We have one year to decide as the first store is not going to open before 12 to 18 months.

Is there any long-term investment figure that Walmart has in mind?
Not really. Walmart is able and willing to invest in India, whatever it takes to grow a business. We know it’s not a short-term investment — it’s a marathon and will take time for these investments to monetise. Do you think state-wise rollout of stores will be problematic?
Pan-India approach would be better but you have to make a start.

Apart from the issue of existing and new investments, any other concerns with the policy?
The other issue relates to 30 per cent clause on sourcing. We want to help the small sector, but we have to understand what all industries are covered.

Will there be anything Walmart-like or American in your India stores?
The Walmart model is simple and based on connecting farmers or manufacturers to customers. Things like the store format, or the store location, do not matter and are not intrinsic to the Walmart model.

What about the products that you get inside the stores? How much of that will be Indian?
At our cash and carry stores, over 95 per cent of the stuff is local. That will be our focus in multi-brand too. It makes economic sense and is efficient. But there are items which have to be imported. Though it will be minimal.